Trading Idea: What to Expect with Barrick Gold Breaking Support

Published on Tuesday, 05 February 2013 07:28 Written by TradersHuddle Wire

New York, February 5th (TradersHuddle.com) - Shares of Barrick Gold Corporation (NYSE:ABX) closed the trading session at $32.35 below calculated support at $32.44. The stock broke down technically, raising concerns as the move might trigger additional selling.

Barrick Gold Corporation (NYSE:ABX) is an international gold company with operating mines and development projects in the United States, Canada, South America, Australia, and Africa.

Barrick Gold's stock was trading in a well defined range with support at $32.44 and resistance at $35.06; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $32.44 will remain in focus as Barrick Gold's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in Barrick Gold can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $32.44. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.